Court dismisses landlord's recovery of possession claim due to greater hardship to tenants' school closure.

[*187] 1980 Jan 30

(STYLIANIDES, P.D.C.)

IN THE DISTRICT COURT OF NICOSIA

The Church of God of Prophecy, through its, Chairman and General Secretary, Chr. Shakallis and C. Shakallis,

Applicants,

v.

Grammar School and Cyprus College of Nicosia and Another,

Respondents.

(Rent Application No 601/79).

Landlord and tenant - Statutory tenancy - Recovery of possession – Premises reasonably required by landlord for own use - Landlord a church - Tenants .using premises as a school - Landlord purchasing premises after the coming into operation of the Rent Control Law,1975 (Law 36/75) for the purpose of gaining possession under section 16(1)

(g) - Not alternative accommodation - If ejectment order-is made school will close down and 35 teachers and 600 students will be seriously and adversely affected - Not reasonable to make an ejectment order - And greater hardship would be caused to the tenants by granting the order – Application dismissed.

T. Eliades, for the Applicants.

A. Panayiotou, for the Respondents.

JUDGMENT

The following judgment was delivered by:-

STYLIANIDES, P.D.C.: The applicants claim [*188] recovery of possession of the premises situated at Strovolos, Chrysseleoussa Quarter, known as “Hadjianastassiou School” on the ground that they are reasonably required for the occupation by the landlord.

The facts in this case are almost uncontested.

The said premises are within the controlled area under the Rent Control Law No.36/75. They were erected by the previous owner, who was running a school, for the purpose of being used for the needs of his school. The premises, as they are today, are suitable and were erected to be used as a school.

The landlord is the Church of God-of Prophecy, It has its headquarters in Cleveland, Tennessee, U.S.A., its European headquarters in U.K. and its headquarters for the Republic of Cyprus in Nicosia. They believe in the Bible. They commenced activities in this country in 1929. As stated before us, they have now about 2,000 followers all over the country. From 1950-63 they had their own premises in the Turkish occupied sector of Nicosia town. From 1963 until 1970 there is no evidence before us where they housed their Church but from 1970 they acquired and built premises in Aglandjia suburb of Nicosia.

Their activities are preaching of the Bible either at their premises or from door to door, obviously in order to convert. They have some youth activities. They officiate marriages and baptism at the Anglican Church of St. Paul, [*189] which was never refused to them though on two or three occasions over the years they had to change the date so as not to coincide in time with activities of the Church of England. Once or more weekly about 100 persons assemble in the premises they own at Aglandjia for reading the Bible or for mass and 2-3 times a year they hold a general meeting of their followers. They want to expand their activities, and for this purpose they want a better and more spacious building.

It appears that the previous owner of the subject premises was declared bankrupt and the premises in question were sold by public auction by the Official Receiver in March, 1979. The applicants inspected the premises. They saw and realized that it has been as from 1974 in the occupation of the respondents, to whom we shall presently refer, but they decided to purchase it. They did actually so at £63,000.-.

This Church of God of Prophecy was registered in April, 1979, as a charitable institution - (see exhibit No.1) - though it was functioning for a number of years before such registration. Their local income is £300 - £400.- per month but they receive remittances from abroad, and in 1979 such remittances were $. 203,000.-. It was stated by the Chairman of the applicants, A.W. 1, Shakallis, who is a Bishop of this Church, that part of this amount has to be repaid by them but he was so vague, that really I am not in a position to say what exact amount they have to refund. [*190] The applicants intend to acquire also land or premises in Limassol for the same object.

Respondent No.1 is, though not so described in the application, a family company, the shareholders of which are respondent No.2: and his wife. Respondent No.2 is the Managing Director of respondent No.1 but he is also the Manager (Headmaster) of the Grammar School and Cyprus College. They are now admittedly statutory tenants of the whole subject premises.

The Grammar School and the Cyprus College owned their own premises where the school was functioning until the catastrophic events of the summer of 1974, when the Turkish invading forces captured the premises of that school. They are well known to every person in Nicosia; they are visible from a distance from the outskirts of this town and the Turkish occupation is indicated by a continuously Turkish flag hoisted on the top of it.

In these premises they had all furniture, fittings, labs, etc., for the proper running and functioning of a secondary school which, according to the evidence, is unique in its own direction and curriculum in the country though, as it was stated, its curriculum is similar to the curriculum of the English School. The Grammar School is a secondary education school; the Cyprus College is for advanced and higher education. They run also a junior school corresponding to the elementary schools but the elementary school has for a decade before 1974 been housed [*191] in rented premises specially erected by the landlord in Ayios Dhometios.

The land on which the pre-1974 premises of the respondents’ school was housed was valued at £500,000.-, the building at £250,000.- and the furniture, fittings, labs, etc., are valued at £5,000.-.

Early in October, 1974, the respondents leased the subject property which was furnished, as before that date it was being used as a school by the previous owner. The respondents run today the same school, i.e. a junior school, with about 140 pupils, most of whom, however, attend the Ayios Dhometios building, a grammar-secondary education school and the Cyprus College. About 600 students attend and take lessons in the subject premises. It is used during the whole day and part of it during evening hours. The respondents have recently purchased - in our view, at a rather very low price - the furniture and fittings of the said school.

Respondent No.2 acquired a piece, of land in the area of Deftera. The purchase price was remitted to him by his father who is living in the U.S.A. That field, however, has no electricity, water supply or even proper access. Respondent No.2, who impressed us as a very active man, approached the Government for a grant or loan and various banks in order to secure a loan to build a new school in the aforesaid field, but all his endeavours were unsuccessful. [*192]

Ioannis Gregoriou, respondent No.2 stated - and this is the only evidence before us - that there is no alternative accommodation in the major Nicosia where he could house the said school. It was put to him in cross-examination that he could let two or three old houses and adapt them for his school needs. The Court asked the cross-examiner if he had any such old house in mind but his reply was in the negative. Respondent No.2 was definite and categorical that there is no other alternative accommodation and there are no premises in Nicosia in which he can move his school. If the Court issued an ejectment order, that would be tantamount to the closing down of the school and thus 35 teachers would have to look elsewhere for employment and 600 students, who are now having the education given by the school - Grammar School and Higher and Advanced School - will have to bring their education to an end as the curriculum of this school - a secondary education – is different from that of the State gymnasia and there is no other similar school where these pupils could find a place

Learned counsel for the applicants, obviously being in agreement with this evidence of the respondent No.2, in his address submitted that the Court faces the dilemma of religion or education. With respect this is not the question we have to determine. This is not the problem this Court has to solve, whether to support education or to support religion. We have to apply the [*193] Law of this country on facts proved by the evidence before us and no more.

The claim is based on the ground that the premises are reasonably required for the occupation by the landlord and that the issue of such order is reasonable. This ground is based on section 16(1)(g) of the Rent Control Law, No. 36/75, which provides as follows:-

16-(1) No judgment or order for the recovery of possession of any dwelling house or business premises to which this Law applies, or for the ejectment of a tenant therefrom, shall be given or made except in the following cases:

………………………………………………:

(g) Where the dwelling house or business premises are reasonably required for occupation by the landlord, his spouse, son, daughter, son-in-law, daughter-in-law, brother or sister, who are over eighteen years of age, and in any such case the Court considers it reasonable to give such a judgment or make such an order:

Provided that no judgment or order shall be given or made under this, paragraph if the tenant satisfies the Court that, having regard to all the circumstances of the case, greater hardship would be caused by granting the order or judgment than by refusing to grant it. [*194]

For the purposes of this paragraph the expression ‘circumstances of the case’ shall include the question whether other accommodation is available for the landlord or the tenant, and the question whether the landlord purchased the premises after the date of the coming into operation of this Law for the purpose of gaining possession under the provisions of this paragraph;

………………….”.

Identical provision is found in the Rent Control Law, Cap. 86, as amended by the Rent (Amendment) Law 1968 and the Rent Control (Business Premises) Law, 1961 (Law 17/61). This provision was taken from the Rent Control legislation in England.

The landlord must establish to the satisfaction of the Court that the premises are reasonably required for his occupation. “Reasonably required” was judicially considered in a number of English cases. The landlord must establish that he is acting bona fide and that he is acting reasonably in requiring possession. These words connote a genuine present need, something more than desire, although much less than absolute necessity, (Aitken v. Shaw (1933) S.L.T. (Sh.Ct.) 21).

In Ikosis v. Thoma, 21 C.L.R. 125, 127, Zekia, J., as he then was, pointed out that the landlord cannot be, in [*195] a case of this nature, the sole arbiter of his requirements once this matter is qualified .by law with reasonableness

In Kennealy and Another v. Dunne and Another (1977) 2 All E.R. 16, Stephenson, L.J., said at page 20:-

“The position seems to be that for a dwelling-house to be reasonably required it must be the subject of a genuine present need on the part of the landlord”.

And further down he adopted the following passage from Megarry’s book on The Rent Acts:-

“In determining whether the premises are reasonably required by the landlord, the position of the tenant (e.g., any hardship to him) is irrelevant, although it is of course material on the specific issue of hardship and the general issue of reasonableness. And a tenant cannot say that his premises are not reasonably required merely because the landlord has other tenants against whom he might have proceeded; for as long as the landlord ‘satisfies ‘the Court that he ‘reasonably’ requires a house ‘to live in it must be left to him to say which ‘of his houses he desires to occupy’. Yet this may be relevant on the general issue of reason-ableness”. [*196]

In Nicos Andreou v. Anastassia Christodoulou (1978) 1 C.L.R. 192, it was held that for a landlord to bring his case within the ambit of the paragraph on which this application is based, he has to establish that the need relied upon is a “definite and immediate” one.

The “reasonableness” of the requirement of the landlord is a different matter from whether it is reasonable to make an order for possession because if a wish is reasonable, it does not follow that it is reasonable in a Court to gratify it. (Shrimpton v. Rabbits (1924)

131 L.T.478, at p.479, per Acton, J.).

No order for possession may be made unless the Court considers it reasonable to do so. There is an overriding requirement that even if the ground of possession be established, the Court must determine judicially that the making of the order is reasonable having regard to all relevant circumstances as they exist at the time of the hearing. The judge must do that in a broad, common-sense way as a man of the world, and come to his conclusion, giving such weight as he thinks right to the various factors in the situation. (Kemp v. Ballachulish Estate Co. Ltd. (1933) S.C. 478; Cumming v. Danson (1942) 112 L.J. K.B. 145, at p. 147; Rhodes v. Cornford (1947) 2 All E.R. 601, at p. 604).

Though the ground on which the landlord relies upon in this case includes a requirement of reasonableness (reasonably required), this does not render the present [*197] requirement of reasonableness mere surplusage.

Every circumstance affecting the interests of either the landlord or the tenant in the premises as well as the interests of the public must be considered. (Cresswell v. Hodgson(1951) 1 All E.R. 710).

Even if these two prerequisites are satisfied by a landlord, the Court may be satisfied by the tenant that, having regard to all the circumstances of the case, greater hardship would be caused by granting the order or judgment than by refusing to grant it. The onus of proof lies on the tenant. The expression used by the legislator is “hardship” and not “inconvenience”. A Court should consider all the circumstances of the case existing at the time of the hearing. “Circumstances of the case” include the question whether other accommidation is available for the landlord or tenant and the question whether the landlord purchased the premises after the date of the coming into operation of this “Law for the purpose of gaining possession under the provisions of this paragraph.

It is noteworthy that according to the English legislation the purchase after an appointed date for the purpose of gaining possession is an unsurmountable obstacle for the landlord to succeed; in our country it is simply one of the circumstances that should be taken into consideration. [*198]

Having regard to the English model and to the wording of our Law, we are of the view that such a purchase is a factor which should be examined with a critical eye. It militates adversely to the landlord.

In Harte and Another v. Frampton (1947) 2 All E.R.604, Asquith, L.J., in delivering the’ judgment of the Court of Appeal on the issue of greater hardship, had this to say at page 606:-

“To attempt to define classes, hardship to whom and to whom alone (apart from the parties) can he taken into account (whether as an element entering into the party’s hardship, or on its own account) appears to us an unhelpful line of approach to the construction of the proviso. The true view, we think is that the county court judge should take into account hardship to all who may be affected by the grant or refusal of an order for possession-relatives, dependants, lodgers, quests, and the stranger within the gates - but should weigh such hardship with due regard to the status of the persons affected and their ‘proximity’ to the tenant or landlord, and the extent to which, consequently, hardship to them would be hardship to him”.

In the present case the Court is satisfied that the applicants have a genuine need of the premises which, however, need alterations in order to function more conveniently and [*199] to expand their activities. The applicants are a church with very limited following. This church owns premises since 1970 at Aglandjia. It is only two or three times a year that they encounter their major difficulties which, however, could be met by leasing one of the-big halls, though, as stated by Bishop Shakallis, it is not advisable to have these assemblies in cinemas. For the holy sacraments St. Paul’s Anglican Church is, with occasional arrangement of time, readily available to them.

There is no alternative accommodation whatsoever for the tenant. If an ejectment order is made, this school has to close down; 35 teachers and 600 students will be seriously and adversely affected. The financial position and resources of the applicants are much better than those of the respondents, who are heavily indebted to the providend funds of P.E.O. and S.E.K., besides the fact that their own school building is under Turkish occupation. Furthermore the fittings and labs, which are the ownership of the respondents, have to be removed, if an order is made, and this to the detriment of the respondents. In other circumstances this might not be a very weighty factor.

On the one side, if the order is not made, inconvenience will be caused to the applicants; on the other side, if the order is made, closing down of the school with all the ill-effects on the respondents, the teachers, the students and their parents will be the inevitable result. If this was the meaning of the [*200] dilemma which the applicants stated that the Court is facing, though cloaked with the words “religion or education”, I have no difficulty in finding for the respondents who in this case represent education.

I find that it is not reasonable to make the order and further that greater hardship would he caused to the tenants by granting the order. Thus both on the issue of reasonableness and of the greater hardship, the tenants are successful.

In the result this application is dismissed but in all the circumstances of the case no order for costs is made.

Application dismissed with no order as to costs.